When China imposed a sweeping ban on Bitcoin mining in mid-2021, the government’s expectation was clear: the industry would vanish overnight, leaving behind empty warehouses and silent machines. For a brief moment, it seemed like Beijing had achieved its goal. The hashrate—the measure of computing power dedicated to mining Bitcoin—plummeted to nearly zero, and mining farms were hurriedly dismantled. Operators fled to friendlier jurisdictions like Kazakhstan, Russia, and the United States, carrying their hardware and expertise with them.
Yet, less than four years later, the story has taken an unexpected turn. According to new reporting from Reuters and industry data compiled by CryptoQuant and Hashrate Index, China is once again a heavyweight in the world of crypto mining. The country now accounts for an estimated 14-20% of the total Bitcoin hashrate, placing it comfortably among the top three mining hubs globally—behind only the U.S. and, depending on the measurement period, either Russia or Kazakhstan.
This quiet resurgence is driven by a combination of factors, chief among them the abundance of cheap, stranded energy in regions like Xinjiang and Sichuan. These provinces, historically known for their excess hydropower and energy infrastructure, have proven irresistible to both individual and corporate miners who see opportunity where others see regulation. As one private miner, Wang, operating in Xinjiang, told Reuters: "A lot of energy cannot be transmitted out of Xinjiang, so you consume it in the form of crypto mining. New mining projects are under construction. What I can say is that people mine where electricity is cheap."
Wang’s experience is hardly unique. The ban may have driven the industry underground, but it did not extinguish the entrepreneurial spirit or the economic logic that underpins crypto mining. As South China Morning Post reports, the resurgence is not only evident in the hashrate figures but also in the fast-rebounding sales of mining rigs from manufacturers like Canaan. The data-centre boom in energy-rich provinces has provided the infrastructure and cover for new projects to sprout, often operating discreetly but at significant scale.
China’s return to the top tier of Bitcoin mining is emblematic of a broader global pattern. Over the past decade, several countries have attempted to stamp out cryptocurrencies by imposing outright bans, only to discover that enforcement is difficult and often counterproductive. Russia, for example, briefly flirted with a full crypto ban in 2022, targeting mining, trading, and payments. The proposal collapsed within weeks as the government realized that regulation—not prohibition—was the more pragmatic path. Today, Russia has legalized crypto mining and even allows the use of cryptocurrencies for international trade.
Zimbabwe’s experience followed a similar arc. In May 2018, the Reserve Bank of Zimbabwe banned all banks and financial institutions from processing payments or trading in cryptocurrencies, citing risks of fraud and instability in an economy already battered by hyperinflation. The ban was swiftly overturned by a High Court ruling later that month, restoring banking access for crypto firms. By March 2020, Zimbabwe’s central bank announced plans for a formal regulatory framework, which now includes licensing requirements for exchanges and taxation, though public warnings about volatility persist.
Bolivia’s central bank, too, initially banned Bitcoin and other unregulated foreign currencies in 2014 to protect the national financial system from volatility and fraud. The ban was reinforced in 2020, but by June 2024, the authorities reversed course, authorizing financial institutions to process crypto transactions. Trading volumes reportedly surged over 500% after the ban was lifted, a testament to pent-up demand and economic pressures such as currency shortages.
India’s trajectory has been equally instructive. The Reserve Bank of India issued a circular in April 2018 prohibiting banks and regulated entities from providing services to cryptocurrency businesses, effectively banning crypto transactions through the formal banking system. But in March 2020, the Supreme Court ruled the ban unconstitutional, reopening the door for banks to support crypto exchanges. Since then, India has opted for a regulatory approach: cryptocurrencies are legal, but gains are taxed at a steep 30%, with a 1% tax deducted at source on transfers. Efforts to establish a comprehensive framework under the Financial Intelligence Unit are ongoing.
Nigeria, Africa’s largest economy, also tried to clamp down on crypto. In February 2021, the Central Bank directed banks to close accounts of crypto traders and block transactions, citing concerns over illicit finance and economic volatility. However, the ban was lifted in December 2023, and banks are now authorized to facilitate crypto transactions through licensed Virtual Asset Service Providers. Regulation includes oversight from the Securities and Exchange Commission, know-your-customer requirements, and anti-money laundering rules. Peer-to-peer trading remains restricted but is closely monitored.
What unites these diverse experiences is a simple lesson: the allure of crypto, especially in regions with economic or infrastructural challenges, is not easily suppressed. Bans may disrupt operations temporarily, but economic incentives—such as cheap electricity, technological know-how, and the global nature of digital currencies—often prove stronger than regulatory efforts. As Reuters notes, China’s renewed hashrate despite ongoing government skepticism illustrates the structural realities of energy and mining economics. Where there is surplus energy that cannot be transmitted or sold, crypto mining offers a way to monetize what would otherwise go to waste.
The implications of China’s mining resurgence extend beyond its borders. The return of Chinese miners could provide a stabilizing force for Bitcoin, offering demand and price support for the world’s largest cryptocurrency. It also raises questions about the effectiveness of outright bans and the adaptability of the crypto industry. As the experience of countries like Russia, Zimbabwe, Bolivia, India, and Nigeria shows, regulation—rather than prohibition—has emerged as the default response, even in places where initial skepticism ran deep.
Looking ahead, the future of crypto mining in China remains uncertain. The government’s stance toward decentralized digital assets is still hostile, and the risk of renewed crackdowns lingers. Yet, as Wang and other miners in Xinjiang and Sichuan demonstrate, the combination of economic opportunity and technological resilience has allowed the industry not just to survive, but to thrive in the shadows.
For now, China’s place among the world’s top mining hubs is secure—a testament to the enduring appeal of Bitcoin and the ingenuity of those who seek to harness its power, no matter the regulatory headwinds.